When a local community development trust is attacked for aiding impoverished foreign migrants and its very existence is threatened, how should it respond?

An obvious way is to reduce or forego its support of the beleaguered foreigners. Or, at the very least, it can seek to placate angry locals by pointing out that its help to migrants represents only a small part of its community work, something analogous to what Planned Parenthood does when it argues that abortions represent just a sliver of its efforts on behalf of women's health.

But Keystone, a social enterprise located in the town of Thetford in the east of England, chose neither way. Instead it went on the offensive, arguing that helping foreign migrants, however unpopular with many locals, was essential to its identity, according to an account in the June issue of theAcademyof Management Journal.

Indeed, "Keystone progressively deepened rather than diluted its association with the migrant population," the account reveals, and the decision paid off handsomely. "A series of high-profile organizations at the national level picked up on and began to talk about the work that Keystone was doing to support the migrant community. The publicity and enhanced profile...generated attention significantly beyond what might be expected of a small social enterprise in rural England...which helped it earn contracts to deliver a range of community projects and services, many of which were unconnected to its support for the migrant community."

To the authors of the paper, Paul Tracey of the University of Cambridge and Nelson Phillips of Imperial College London, the success of Keystone's strategy is an illustration of the power of moral conviction to prevail over stigma. Nor is that power limited to nonprofit groups with a social mission; it applies as well to for-profit businesses.

This point emerges from a second study co-authored by Prof. Tracey that was recently accepted for future publication in theAcademy of Management Journal. The study, written with Cambridge doctoral student Christian E. Hampel, traces the early history, a century and a half ago, of the Thomas Cook Travel Agency, which aroused virulent opposition in the Victorian era because its mission of providing foreign tours for working-class and middle-class people ran counter to the tradition that travel abroad was the exclusive province of aristocrats and selected wealthy families. As the authors explain, "The Victorian elite stigmatized the travel agency as vulgar and immoral. For instance, the establishment newspapers labeled Cook as 'an unscrupulous man,' his trips as an 'uncouth mode of conveyance,' and his tourists as 'barbarian hordes.' "

Comments Prof. Tracey: "From a 21st-century perspective, it's hard to conceive that something as innocuous as arranging foreign tours would cause the uproar it did a century and a half ago. An aspect of this episode that gives hope, though, is that within two decades the same newspapers that initially denounced Cook ended up crediting the agency with providing 'invaluable services' and lauded its founder as being 'in the rank of public benefactors.' Hopefully, we'll see a similar turnaround in public attitudes from the strong animus against migrants that has become so pervasive in Europe and the U.S."

In both situations, the professor adds, organizations prevailed because their leadership not only believed strongly in what they were doing but had the courage to make their case straightforwardly in the public arena and internally as well. "The conventional wisdom," he says, "is that organizations should deal with stigma by blurring their image or placating their stigmatizers. What these studies suggest is that ultimately the ability of an organization to overcome stigma requires real conviction – the ability to make the case for itself, if not to the satisfaction of everyone, at least to enough stakeholders and enough of the public to survive and perhaps even to flourish."

Keystone was founded in 2003 with public money on the model of community development corporations that are familiar in the U.S. – that is, as a nonprofit that seeks to address poverty and inequality in a low-income area through entrepreneurial activity. The object was for the organization to be financially sustainable, and, indeed, about 85% of its annual budget derived from investments in rental property and business ventures that included a conference center, a cafe, a bicycle recycling business, and a retail food business selling local produce.

As local antagonism toward foreigners rose, Keystone came under severe pressure for its migrant-assistance efforts not only from local politicians and press but from within the organization. The authors observe that "stigmatization creates divided loyalties in organizations, with some members sympathetic to those who are stigmatizing it, despite being treated badly by them, and blame [being] attributed to leaders for associating the organization with a stigmatized group."

Problems arose as a result of Keystone's efforts to assist two groups of foreign migrants who swelled the town's population from about 22,000 to 32,000 over the course of a decade – several thousand, beginning about 2000, from Portugal and Portuguese-speaking Angola and Brazil and a larger influx from eastern Europe after eight countries there joined the EU in 2004. As the study notes, "Some British residents began to complain that their way of life was under threat...that migrants were taking jobs and housing that would otherwise be allocated to British people. The hostility was also evident in racially motivated crime, which increased sharply."

In the face of serious internal and external opposition, Keystone's chief executive, Neil Stott, who had led the organization from its beginning, stood firm. In the words of the study, while Stott "could understand the position of the staff who resisted Keystone's support for the migrant population...he repeatedly said that these attitudes represented an existential threat to Keystone." Instead of pulling back, he launched a two-pronged campaign, 1) arguing that migrants were mostly young and eager to work (even if it meant taking unenviable jobs in food processing or as porters or cleaners), and therefore they gave a boost to the local economy, and 2) communicating in no uncertain terms to Keystone's staff that promoting social justice and community cohesion were the organization’s core values and that backing away from them would be a denial of its basic identity.

Stott's strong stand, which gained the backing of Keystone's board, produced a turnaround in press coverage of the organization and, as indicated earlier, opened up new funding opportunities. In addition, as the study notes, "A clearer sense of purpose appeared to have instilled many organizational members with a sense of confidence in their ability to tackle difficult issues, which facilitated Keystone's engagement with other stigmatized groups. For example, Keystone began to provide support for the long-term unemployed, a group that carried the stigma of being 'scroungers' in the eyes of part of the community."

The study quotes Stott to this effect: "We face some real challenges. We're now in a situation where you've one in five people saying they're going to vote UKIP [an anti-immigration party]...So it's not easy being an organization that supports migrants. But my feeling is that there's a real optimism about the future and our ability to thrive in this environment."

On that high note Dr. Stott left Keystone in 2015, having led the organization for 12 years, to become the executive director of the Centre for Social Innovation at Cambridge's Judge Business School, where he now shares an office with Prof. Tracey.

The paper, “Managing the Consequences of Organizational Stigmatization: Identity Work in a Social Enterprise," will be in the June issue of the Academy of Management Journal. This peer-reviewed publication is published every other month by the Academy, which, with 19,000 members in 127 countries, is the largest organization in the world devoted to management research and teaching. The Academy's other publications are Academy of Management Review, Academy of Management Perspectives, Academy of Management Learning and Education, Academy of Management Annals, and Academy of Management Discoveries.